Drug manufacturers often describe pharmacy benefit managers (PBMs) as “middlemen.” That’s intended as an insult, but it shouldn’t be. PBMs are middlemen in an enormously complex drug supply chain, embracing their role between pharmaceutical companies and patients to ensure drug prices reflect value. No one else is empowered to say: “No, the price of that drug is too high.”
PBMs and pharmaceutical companies have a long history of working together to get the latest treatments in the hands of patients. It was only after drug makers came under scrutiny for their pricing practices, that they began to speak negatively about PBMs. Even as they speak derisively of PBMs, they work with them to ensure their products can reach as many people as possible.
PBMs provide undeniable benefits, which pharmaceutical companies would like to keep under wraps. Read on to learn more.
Without PBMs as middlemen, medicine gets more expensive
PBMs are the price shield many patients don’t know they have. Year after year, the pharmaceutical industry increases the list prices on numerous medications, including many commonly advertised on television — think names like Humira or Cosentyx.
In January 2022 alone, GoodRx tracked increases in the list prices of more than 800 prescription medications. And these price hikes are far higher than the inflation rate: A report from the U.S. Department of Health and Human Services (HHS) found that between July 2021 and July 2022, the list prices of more than 1,200 prescription drugs averaged a 31.6% increase, nearly four times more than the 8.5% overall inflation rate during those 12 months.
Drug companies like to declare that almost no one pays list prices — and that’s true. The reason is that Express Scripts and other PBMs are acting as middlemen, lowering net prices. The beneficiaries are people on health insurance plans, whether provided by their employer, union, or, in some cases, government benefits like Medicare Part D.
“PBMs reduce the net cost of drugs in the most expensive therapy classes so plan sponsors and their members don’t bear the full brunt of high drug prices,” said Harold Carter, chief pharmacy relations officer at Express Scripts. “Clients receive 95% of drug rebates that Express Scripts obtains by negotiating with pharmaceutical companies. Express Scripts gets paid to cover the administration of the client’s pharmacy benefit, including services such as reporting and analytics. The client always has the right to audit based on their contract.”
Express Scripts’ clients have full transparency and choice in how they choose to direct their rebate and how to utilize those savings. They can use the rebate value in a variety of ways including to lower the total cost of care through lower premiums and cost sharing, expanded medication lists, funding for wellness programs, and reducing the amount their member pays for the medicine at the pharmacy counter.
The right medicine is a job for your PBM
Express Scripts administers prescription drug plans for over 100 million Americans, many of whom live with chronic conditions and need prescription medicines to achieve their best possible health. Express Scripts enables these patients to access the medicines they need — when, where, and how they need them, and at a fair price.
Express Scripts builds formularies, or lists of covered medications, to provide clients with the most clinically appropriate, high-quality pharmaceutical products. Our formulary development process is based on three principles:
- Clinical appropriateness of the drug — not cost — is always the foremost consideration
- The prescribing physician always makes the final decision regarding a patient’s drug therapy
- Independent clinicians evaluate each medication’s safety and effectiveness
“We’re focused on building formularies that deliver the most clinically effective medicines at the fairest price,” Carter said. “The role we play as middlemen bridges the gap between drug manufacturers and pharmacies, hospitals, and health plans.”
PBMs are behind the scenes … on your behalf
PBMs work on behalf of clients and patients to reduce prescription drug costs, expand access to the right medications, and improve health outcomes for millions of Americans. While often unnoticed, the work of these behind-the-scenes middlemen gives a voice to those on the other side of the pharmacy counter to ensure better health and financial outcomes.